By any standard, the planned Navajo
Transmission Project ranks as one of the nation's
most ambitious power grid expansions, the kind government
and industry experts say is essential to shoring
up electricity reliability across the power-hungry
West.

Starting in northwest New Mexico,
the high-voltage line would stretch 470 miles across
the desert Southwest and carry enough electricity
to power more than 1 million homes in places like
Las Vegas and Phoenix.

But last week, the Department of the
Interior's Board of Land Appeals put the brakes
on the 18-year-old project, in part because it relied
on an outdated environmental impact statement (EIS)
that overlooked critical habitat designations for
two species -- the desert tortoise and southwestern
willow flycatcher -- that were made since the project
was first proposed by the Navajo Nation 18 years
ago.

Environmental groups, long opposed
to the Navajo Transmission Project out of concern
that it would encourage development of new coal-fired
power in the Four Corners region, cheered the appeals
board's decision as part of a new mindset in Washington
whereby Obama administration regulators would give
much tougher scrutiny to projects that only months
ago seemed destined to go forward even if they rendered
a high environmental cost.

"I think they ran into a lot more
problems than they thought," said Mike Eisenfeld,
New Mexico coordinator for the San Juan Citizens
Alliance, which opposes the project.

Others, like Doug MacCourt, an attorney
for the Navajo Nation's Diné Power Authority, characterized
the board's decision as a minor setback, adding
that the line's developers will simply update the
deficiencies in the EIS and move forward.

Regardless of the outcome, the troubles
for the Navajo Transmission Project suggest an emerging
policy contradiction for the new Obama administration,
which on the one hand has endorsed a wholesale rebuilding
of the nation's electricity grid while at the same
time promising a higher standard of adherence to
the nation's environmental laws, including ramped-up
protections of public lands from large-scale energy
development.

Indeed, the upgrade and expansion
of tens of thousands of miles of transmission lines
is a centerpiece of President Obama's plan to expand
the use of alternative energy like wind and solar
power. Six-and-a-half billion dollars provided under
the American Recovery and Reinvestment Act is aimed
at providing tax breaks and other incentives to
build out the infrastructure necessary to move that
"green power" from rural production areas to market.

Just yesterday, Interior Secretary
Ken Salazar issued his first secretarial order that
makes the production and delivery of renewable energy
a top priority for the department. A key piece of
that, he said, was securing rights-of-way for new
transmission in the West.

Yet as the new administration enters
its third month in office, the difficult job of
reconciling energy and environmental priorities
has come to bear on the debate over transmission,
with the Navajo Transmission Project becoming exhibit
A in what could be a protracted fight over the siting
and permitting of new power lines.

But it certainly is not the only one,
nor is it the largest.

New energy corridor

Consider the newly designated West-wide
Energy Corridor -- a 6,000-mile right-of-way that
crosses federal lands in 11 states. Among other
things, the corridor should help facilitate the
construction of new electricity transmission and
distribution lines, as well as provide a designated
thruway for new oil, natural gas and hydrogen pipelines.
The Interior and Agriculture departments, which
jointly manage much of the public lands in the West,
formally adopted the corridor concept into their
resource management plans just weeks before the
Bush administration left office. The Obama administration
says it is committed to the planning concept, as
well.

"This is a big picture look at how
we want to coordinate transmission lines across
the western U.S.," said Kate Winthrop, project manager
for the West-wide Energy Corridor at the Bureau
of Land Management.

The siting and construction
of high-voltage transmission lines across the
West could create tension between dueling federal
priorities -- upgrading the nation's electricity
grid while also preserving pristine public lands
and wildlife habitat. Photo courtesy of Department
of Energy.

But while the administration is pushing
for new rights-of-way for energy projects, Democrats
in Congress are pursuing a separate and potentially
conflicting set of measures that would significantly
increase protections on public lands, including
the designation of 2.1 million acres of wilderness
-- the most in 15 years. Transmission lines and
all other forms of energy development are strictly
forbidden in such areas.

Yesterday, House Republicans blocked
the omnibus lands package containing the land protections
when the measure was brought up under suspension
of the rules. But proponents expect the bill to
have another chance at passage this year.

Though Winthrop said the federal agencies
were careful to site the energy corridor away from
environmentally sensitive areas, no one is sure
whether the designated energy corridor would bisect
a wilderness area or other protected land. "We are
concerned about ... the ongoing integrity of the
corridors," she said. "We've tried to anticipate
a lot of the major concerns during development."

There are other problems, too.

The Center for Biological Diversity
has already notified the Interior and Agriculture
departments that it will sue to stop the energy
corridor, claiming the government failed to meet
requirements under the Endangered Species Act to
fully evaluate the effects of transmission lines
on salmon, sage grouse and other threatened wildlife,
said Amy Atwood, senior attorney for the center's
public lands program.

Katie Fite, biodiversity director
for the Western Watersheds Project in Boise, Idaho,
said the overall issue has placed the environmental
community in an awkward position. While she said
the environmentalists support the development of
renewable energy, the effort needs to be done in
a way that does not create further environmental
problems.

"I have no problem in speaking out
against a wind project if it destroys beautiful
wildlife areas when there are better alternatives,"
Fite said. "And it will mean the destruction of
some beautiful natural areas in some very remote
locations if these big power lines are built."

A pressing need

Few argue against the idea that the
national transmission grid needs an overhaul.

Many of the high-tower transmission
lines that stretch from coast to coast have stood
for decades and were never designed to transport
electricity over great distances.

That changed in the mid-1990s, with
the deregulation of the electric utility industry.
Deregulation created huge, multi-state markets that
extended across entire regions, giving rise to the
need for a transmission system that could carry
power hundreds of miles away from the generation
source.

The 1990s and early 2000s also witnessed
a growing frequency of large-scale grid failures,
culminating with the 2003 Northeast blackout, which
left an estimated 50 million people without power
in the United States and Canada on a muggy August
afternoon. At the time of the blackout, the worst
in U.S. history, more than 500 electric generation
units at 265 power plants shut down, creating gridlock
along the Eastern Seaboard from New York City to
Baltimore and eastward to Detroit, Toronto and Cleveland.

Former Energy Secretary Bill Richardson,
within hours of the blackout, referred to the United
States as "a superpower with a Third World electricity
grid."

Compelled to act, Congress passed
the Energy Policy Act of 2005. Among other things,
the legislation required land-management agencies
to designate energy corridors to facilitate the
expansion of the grid. The 6,000-mile West-wide
Energy Corridor is the largest project conceived
to date under the 2005 mandate.

But the West-wide corridor is limited
to federal land, and it is frequently interrupted
-- in some cases for hundreds of miles -- by intersecting
state and private parcels. Some state governments
have been especially reluctant to permit interstate
transmission projects unless they receive a share
of the electricity, said Greg Williams, a former
Federal Energy Regulatory Commission attorney now
at the law firm Bracewell & Giuliani.

That is one of the motivations behind
legislation introduced last week by Senate Majority
Leader Harry Reid (D-Nev.). Reid's proposal would
allow FERC to brush aside state objections to the
siting of transmission lines from alternative energy
sources if state and regional leaders cannot agree
where to route the lines within specific "renewable
energy zones" that the Department of Energy would
be required to designate (E&E Daily, March 3, 2009)

Sen. Jeff Bingaman (D-N.M.) has proposed
similar legislation, and the Senate Energy and Natural
Resource Committee, which he chairs, is expected
to discuss the issue at a hearing today (E&E Daily,
March 10, 2009).

"The Reid bill will connect the dots"
between federal and state land, Williams said.

"If you accept the notion that you
want to get renewables on the map, that you want
to encourage the generation of alternative electricity,
you have to do something to get it to market," Williams
said. "Once you've made that decision, then, yes,
you need the transmission."

While renewable energy projects are
planned for virtually every region of the country,
there is evidence that the West will see a disproportionate
need for new transmission, given its high potential
for development of solar arrays, geothermal plants
and wind farms.

The region's two largest public land
managers -- the Bureau of Land Management and the
Forest Service -- are currently evaluating more
than 400 applications for wind and solar projects
on federal lands. If approved, those projects would
cover 2.3 million acres in seven states and generate
an estimated 70,000 megawatts of electricity, enough
to power more than 50 million homes.

BLM is completing a programmatic environmental
impact statement examining the effects of these
proposed projects on federal lands and will recommend
policies to mitigate damage. At the same time, biologists
from the Fish and Wildlife Service are leading a
federal advisory committee to identify steps the
federal government should take to regulate the alternative
energy industry.

Is bigger always better?

Few argue that the current electricity
transmission system meets the needs of a 21st-century
economy. But there is an emerging school of thought
that says large-scale electric transmission lines
are unnecessary to meet the nation's power needs,
and in fact, proposals such as the Navajo Transmission
Project or the West-wide Energy Corridor may undermine
the environmental benefits that come from switching
from fossil fuel-based energy to wind and solar
power.

The better way to go, according these
groups, is to make electricity a home-grown commodity.

One way to do that is to encourage
development of "distributed power," where energy
derived from a single source, such as a wind farm,
is distributed through a local grid that serves
a designated geographic area such as a municipality
or even a county.

Advocates of the approach say it can
lower costs, improve efficiency and reliability,
reduce emissions, and offer flexibility to communities
that have multiple generation assets, such as wind
and solar. Distributed power projects also reduce
the need for multibillion-dollar transmission lines
that require wide rights-of-way and cut indiscriminately
across farms, forests and wildlife habitat.

More localized transmission could
also save utilities and ratepayers money, said Ian
Bowles, secretary of energy and environmental affairs
for the state of Massachusetts and a former Clinton
administration adviser. As much as 3 percent of
the electricity coursing through a power line is
lost into thin air due to resistance, and that number
increases the farther the power is transported.

But while distributed power may work
well in some areas, the overriding trend in the
West is to expand high-voltage transmission lines
and move large volumes of power from interior states
like New Mexico, Wyoming, Montana and Idaho to demand-hungry
markets in California and the boom cities of Las
Vegas and Phoenix.

Federal officials and industry experts
say that transmission projects currently in the
development pipeline will carry an additional 13,000
megawatts of electricity across the region by 2018,
enough to power more than 10 million homes.

Grouse, salmon concerns hinder
Gateway West

Among them is the $2 billion Gateway
West project, expected to span nearly 1,200 miles
across Wyoming and Idaho to Oregon, where it will
connect with the much larger Western power grid
and "keep the lights on" during peak demand, said
Paul Kjellander, administrator of Idaho's Office
of Energy Resources.

But the project, sought by utility
giant PacifiCorp, has a new nemesis.

The sage grouse -- first described
by Lewis and Clark during their 1804 expedition
-- is currently under review by the Fish and Wildlife
Service for possible addition to the endangered
species list. The bird's habitat includes areas
in the proposed paths of a number of proposed transmission
line projects, including Gateway West (Land Letter,
Aug. 21, 2008).

The concern is that the grouse depends
on a sagebrush cover for food as well as protection.
The transmission towers, it is argued, would clear
away that habitat and allow predators like ravens
to perch on the towers and indiscriminately prey
upon grouse.

If the sage grouse were added to the
endangered species list, FWS would likely require
transmission owners and other federal land-management
agencies to take steps to protect the sagebrush
plains before authorizing new corridors.

Kjellander said he fears that such
conditions could pose a big problem for the larger
West-wide Energy Corridor, adding that the federal
agencies in charge of evaluating the corridor's
environmental impacts did not thoroughly examine
endangered species implications.

Indeed, the National Oceanic and Atmospheric
Administration warned last year in written comments
that portions of the proposed energy corridor in
Washington and Oregon cross areas designated as
critical habitat for chinook salmon. NOAA officials
wrote that the agencies should consult with FWS
and the National Marine Fisheries Service to satisfy
federal law before proceeding.

Salmon habitat issues are expected
to be at the fore of the forthcoming Center for
Biological Diversity lawsuit challenging the West-wide
Energy Corridor, said Atwood, the center's attorney.

For these and other reasons, Kjellander
said, industry stakeholders have grown wary about
moving forward. "The first [company] to use one
of those corridors is going to get hit full-scale
with all those issues," he said.